Build It And They Will Come – Speculative Developments at the Forefront of Brisbane’s Industrial Market

07 April 2017

Confidence in the Brisbane industrial market is strong as demonstrated by the increased demand for speculative developments, with 31 percent being committed to prior to completion, according to new Savills research.

Savills has undertaken specific research into Brisbane’s speculative industrial development market with the analysis finding these properties are recording an average time on market of under six months, with only 13 percent of the city’s speculative industrial developments on the market in excess of 12 months.

“Institutional industrial land owners are capitalising on the recent lift in leasing demand - particularly in well situated locations close to major arterial roads, which is seeing speculative developments return to the forefront of the Brisbane industrial market,” Savills Associate Director of Research and Consultancy for Queensland, Yvette Burton said.

Savills State Director of Industrial and Business Services for Queensland, Callum Stenson said the profile of speculative industrial developments in Brisbane has changed considerably over the last decade.

“10 years ago speculative buildings were dominated by the private market and their average size was 2,500sq m. The key players today however, are institutional owners, with the average building size being 11,455sq m, and the average rental rate, $112/sq m,” Mr Stenson said.

“Incentives although trending higher, are still well below the southern states, especially Victoria.”

Recent successes in the industrial speculative development market include, DEXUS in Larapinta where 23,000sq m was leased to two separate tenants in Q4 2016, and Goodman leasing 10,000sq m in Lytton as well as a further 14,500sq m in Redbank.